Robust compliance program may help prevent criminal prosecution for fraud

Having a strong compliance program is more important than ever, due to substantial growth in resources dedicated to investigating and prosecuting health care fraud in the Department of Justice (DOJ), HHS Office of Inspector General (OIG), and Federal Bureau of Investigation (FBI). At a Health Care Compliance Association (HCCA) webinar titled “The Consideration of Compliance Programs In Criminal Investigations,” two partners at Hogan Lovells—Gejaa Gobena, a former Deputy Chief of the Fraud Section in the DOJ Criminal Division, and Thomas Beimers, former Senior Counsel with the OIG and former DOJ prosecutor for a Medicare Fraud Strike Force—explained the role of compliance programs in investigations. Although compliance programs used to be an after-thought in white-collar crimes, there is now a heavy emphasis on self-disclosure, compliance, remediation, and clarity/metrics.

According to Gobena and Beimers, U.S. criminal enforcement’s current priorities are founded upon the belief that affecting general corporate behavior is the maximum deterrent for fraud and abuse. Therefore, enforcement agencies recognize cultures of strong compliance and thoughtful remediation and focus on individual culpability when possible. Prosecutors are not just evaluating existing compliance measures and remediation as a factor in charging decisions; now, compliance is being scrutinized at all stages, asking not only what happened but also why it happened and what an organization did about it following discovery. For example, did misconduct occur because of or in spite of existing compliance measures? Recidivism is a negative factor, as is the pervasiveness of the misconduct.

Self-disclosure, said Gobena and Beimers, has become a deciding or major factor for many prosecutors; they warned, however, that self-disclosure is only possible when a company has a robust compliance culture. The way the DOJ treats a health care organization can depend on how the misconduct comes to the prosecutors’ attention. It may determine whether the organization is charged at all, but conversely, a weak compliance culture may be equated with evidence of intentional misconduct. Gobena and Beimers also said that in many recent corporate criminal or civil resolutions, companies have agreed to a corporate monitor, and thereby avoided entering into a Corporate Integrity Agreement (CIA) with the OIG.